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Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The company's cost accountant has gathered the following information needed to perform a variance analysis at the end of the month: Standard Cost Information Direct materials..... Quantity allowed per unit . Direct labor rate ..... Hours allowed per unit .. Fixed overhead budgeted Normal level of production .. Variable overhead application rate Fixed overhead application rate ($12,000 _ 1,200 units)... 10.00 per unit Total overhead application rate. . $5 per pound w .100 pounds per unit $20.00 per hour 2 hours per unit $12,000 per month 1,200 units $ 2.00 per unit $12.00 per unit Actual Cost Information Cost of materials purchased and used ... Pounds of materials purchased and used . Cost of direct labor... $468,000 .104,000 pounds $46,480 2,240 hours Hours of direct labor .. aure2,352 $12,850 .1,000 units Cost of variable overhead Cost of fixed overhead . Volume of production Instructions 1. Compute the direct materials price variance, given an actual price of $4.50 per pound ($468,000 + 104,000 pounds). 2. Compute the materials quantity variance, given a standard quantity of 100,000 pounds allowed to produce 1,000 units (1,000 units x 100 pounds per unit).

Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The company's cost accountant has gathered the following information needed to perform a variance analysis at the end of the month: Standard Cost Information Direct materials..... Quantity allowed per unit . Direct labor rate ..... Hours allowed per unit .. Fixed overhead budgeted Normal level of production .. Variable overhead application rate Fixed overhead application rate ($12,000 _ 1,200 units)... 10.00 per unit Total overhead application rate. . $5 per pound w .100 pounds per unit $20.00 per hour 2 hours per unit $12,000 per month 1,200 units $ 2.00 per unit $12.00 per unit Actual Cost Information Cost of materials purchased and used ... Pounds of materials purchased and used . Cost of direct labor... $468,000 .104,000 pounds $46,480 2,240 hours Hours of direct labor .. aure2,352 $12,850 .1,000 units Cost of variable overhead Cost of fixed overhead . Volume of production Instructions 1. Compute the direct materials price variance, given an actual price of $4.50 per pound ($468,000 + 104,000 pounds). 2. Compute the materials quantity variance, given a standard quantity of 100,000 pounds allowed to produce 1,000 units (1,000 units x 100 pounds per unit).

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 1E: In all of the exercises involving variances, use F and U to designate favorable and unfavorable...
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I. Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The company's cost accountant has gathered the following information needed to perform a variance analysis at the end of the month: Standard Cost Information Direct materials .... Quantity allowed per unit . Direct labor rate .... Hours allowed per unit .. Fixed overhead budgeted . Normal level of production. Variable overhead application rate.. Fixed overhead application rate ($12,000 _ 1,200 units)... 10.00 per unit Total overhead application rate..... .. $5 per pound .100 pounds per unit $20.00 per hour . 2 hours per unit $12,000 per month 1,200 units $ 2.00 per unit $12.00 per unit Actual Cost Information Cost of materials purchased and used... Pounds of materials purchased and used . Cost of direct labor.. Hours of direct labor.. $468,000 .104,000 pounds $46,480 . 2,240 hours $2,352 .$12,850 .1,000 units Cost of variable overhead Cost of fixed overhead . Volume of production. Instructions 1. Compute the direct materials price variance, given an actual price of $4.50 per pound ($468,000 + 104,000 pounds). 2. Compute the materials quantity variance, given a standard quantity of 100,000 pounds allowed to produce 1,000 units (1,000 units x 100 pounds per unit).
Transcribed Image Text:I. Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The company's cost accountant has gathered the following information needed to perform a variance analysis at the end of the month: Standard Cost Information Direct materials .... Quantity allowed per unit . Direct labor rate .... Hours allowed per unit .. Fixed overhead budgeted . Normal level of production. Variable overhead application rate.. Fixed overhead application rate ($12,000 _ 1,200 units)... 10.00 per unit Total overhead application rate..... .. $5 per pound .100 pounds per unit $20.00 per hour . 2 hours per unit $12,000 per month 1,200 units $ 2.00 per unit $12.00 per unit Actual Cost Information Cost of materials purchased and used... Pounds of materials purchased and used . Cost of direct labor.. Hours of direct labor.. $468,000 .104,000 pounds $46,480 . 2,240 hours $2,352 .$12,850 .1,000 units Cost of variable overhead Cost of fixed overhead . Volume of production. Instructions 1. Compute the direct materials price variance, given an actual price of $4.50 per pound ($468,000 + 104,000 pounds). 2. Compute the materials quantity variance, given a standard quantity of 100,000 pounds allowed to produce 1,000 units (1,000 units x 100 pounds per unit).
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